U.S. credit card company Capital One has emerged as a favorite to buy Internet bank Egg from majority shareholder Prudential, following stalled talks between the UK insurer and MBNA, the Sunday Telegraph reported.
Sources close to the situation told Reuters last month that MBNA, the world's largest independent credit card lender, was moving closer to buying Egg and was in talks with Prudential Plc, which owns 79 percent of Egg.
The paper, citing unidentified bankers, said the Virginia- based Capital One had taken advantage of haggling between MBNA and Prudential and muscled in with a rival offer for Egg which valued it at more than 1.4 billion pounds ($2.55 billion).
None of the firms were immediately available for comment.
Egg, which floated at 160 pence in 2000, rose to a peak of 197-3/4 pence in January after Prudential announced it was in talks over its stake.
Founded in 1998, Egg offers mortgages and savings and checking accounts but its biggest business is its credit card operation, which has 2.7 million customers and nearly six percent of the UK market.
A successful business in the UK, Egg's performance has been dragged under by its loss-making French operation, which helped double annual losses last year to 34.4 million pounds.
Egg has struggled in France since launching "La Carte Egg" credit card there in 2002 after buying French Internet bank Zebank. Customer numbers failed to meet expectations, forcing Egg to almost double its investment budget and delay a target for breaking even by a year to 2005.